Brand loyalty is a two-way street— how online communities strengthen your brand's customer experience

Every brand, regardless of industry, aims to develop loyalty with its customers. At its core, brand loyalty is the sum of a customer's journey, an intricate tapestry woven from each of their continued experiences with a brand. It's also how brands engage, connect, and cater to their audience throughout the customer journey, which is why a thriving customer base that continues to contribute to your brand's success is the golden ticket to long-term prosperity and increased customer lifetime value (CLV).

But getting there requires more than delivering a great product or service; incredible customer loyalty necessitates nurturing relationships and building trust with your customers long after their purchase. Every touchpoint–from the initial encounter to post-purchase support–is pivotal in shaping a customer's loyalty to a brand.

In this way, the customer journey functions as a two-way street, one that enables brands and their customers to engage and react with each other between each touchpoint.

One increasingly powerful solution that can make the most of these touchpoints is the brand-owned community. These online spaces offer a unified environment where customers can proactively resolve issues, forge invaluable peer-to-peer connections, and contribute feedback to products, services, or the brand itself.

The result? Businesses that invest in brand-owned communities establish self-propelled support systems that actively foster relationships, fortifying trust, loyalty, and retention with the brand, ultimately leading to a substantial boost in CLV. And the benefits that result can extend across an organization, laddering all the way up to the executive's desk in the form of improved ROI.

In this blog, we'll dive deeper into some brand loyalty missteps companies take and explore how online communities are a surefire way to get one of these CLV-boosting two-way streets in gear.

As you can imagine, there is no one-size-fits-all approach to developing long-term brand loyalty with customers. Many factors work together to create a customer's consistent commitment to a brand. Product quality, customer service, marketing and brand identity, and loyalty programs can all feed into why a customer returns to a brand again and again.

However, one common factor that’s always at play is consistency. Customers are more likely to remain loyal when they can trust a brand will always meet or exceed their expectations. According to Entrepreneur.com, “Consistency reinforces positive values and builds a strong foundation of trust and credibility from which a brand can continue to grow.”

To establish consistency with your audience, you must also understand your demographic because it shapes how customers perceive and connect with your brand, with each generation bringing unique expectations and preferences to the table, often in ways that might surprise you.

We recently conducted research and found that Gen Z and millennial respondents find feedback more critical in their brand loyalty than older generations do. In fact, 35% of millennials stated that their brand loyalty increases when they have the opportunity to provide customer feedback and then see the company take action on that feedback. This process enables customers to feel like they shape the brand's future and cultivates a sense of ownership and belonging, reinforcing their loyalty.

Critically, though, soliciting feedback is only the first step. Brands must also take action and communicate with customers throughout the process.

Customer trust is the foundation for building brand loyalty. Customers want to feel emotional connections to brands throughout their customer journey. The more connection a customer feels with the brand, the more trust and loyalty they have. However, brands can actually damage customer trust when there is a lack of transparency, ineffective brand communication, and neglect of their loyal advocates.

Next, we’ll walk through several common missteps that can significantly hinder the process of turning customers into enthusiastic brand advocates.

Silence is not always golden

In an era where information is on demand and readily accessible, brand transparency is non-negotiable. Consumers want direct, honest communication from brands and crave access to the people behind the company.

They also want to share their experiences and grow with the brand. When brands fall short in this aspect, when they hide behind curtains of secrecy or fail to address concerns openly, it erodes trust. It disrupts what should be the natural progression from customer to loyal brand advocate. 

Lack of brand involvement post-sale

According to Forrester, improving the experience of customers is a top priority for marketing leaders in the coming two years, so this is an ongoing challenge for many executives. When brands fail to engage in post-sale activity, they miss opportunities to strengthen the customer-brand relationship.

Customers want an experience where they can participate as part of a larger group and feel a part of a more significant experience. Active involvement after a customer makes a purchase nurtures loyalty and accelerates the journey toward advocacy. 

Overlooking opportunities for rewards

Customer rewards are another major key to brand loyalty. Our research shows that 39% of respondents feel that customer rewards programs are their biggest driving factor when it comes to being loyal to a business. Furthermore, 57% percent of Gen X consumers (ages 42-57) and 54% of consumers aged 58-67 say they want better loyalty rewards.

In a world where 80% of your future profits will come from 20% of your existing customers, failing to seize these reward-driven opportunities is a misstep that brands can no longer afford to make.

One of our own surveys shows that 92% of consumers value transparency as somewhat or extremely important during their customer journey. This makes sense, as transparency builds a solid foundation of trust while encouraging referrals from satisfied customers willing to share their positive experiences.

However, a staggering 66% of respondents in this same survey also mentioned they would recommend a brand specifically because it offers a helpful online brand community. These results demonstrate that when brands create a space to open up and engage honestly with their customers, they secure loyalty and encourage customers to advocate for the brand.

Additionally, consumers favor peer-generated content for its authenticity and relatability. Such content provides unfiltered, diverse opinions, building a sense of community and offering transparency about its origins. It offers social proof, evokes emotional connections, and is readily accessible.

By hosting peer-generated content within a community, brands seize the opportunity to capture, curate, and amplify the most impactful discussions. This fosters heightened customer engagement and drives more purchases. The peer-to-peer content shared through these communities serves as a catalyst, propelling the average spend per customer to new heights.

Customers seek quick solutions to their problems. Online communities offer the perfect space to host those answers. As our Brand Confidence Guide highlights, companies can significantly influence loyalty and customer retention metrics by facilitating instant and helpful replies in dedicated spaces.

Additionally, the guide emphasizes that loyal customers often become brand defenders when they feel involved in decision-making and when brands foster transparent communications about reasons for change. By creating a space where customers can voice their opinions and feel heard, brands tap into valuable feedback while solidifying customer loyalty.

Brand-owned communities also create a direct self-service channel for customers to engage with brand representatives. Customers can post their concerns within these communities when they encounter problems or have questions. At the same time, other users who have faced similar issues can offer advice or share their own experiences, often providing important insights and solutions. Additionally, communities allow brand representatives or customer support agents to actively participate in these interactions, offering immediate assistance and guidance, and resolving customer issues in a more personalized and timely manner.

Best of all, communities empower customers by granting them access to a vast repository of knowledge and previous issue resolutions. Users can search for past discussions or FAQs, which are often meticulously curated, to find solutions to their problems independently. This enhances self-service capabilities and saves both the brand and its customers valuable time and resources. As such, these communities serve as dynamic, user-driven knowledge hubs, making issue resolution more efficient and collaborative, ultimately improving customer satisfaction and encouraging repeat business.

Gamification is the strategy of integrating game elements like point systems, leaderboards, badges, or other game-related features into conventional activities to boost engagement and motivation. Doing so can inject an element of fun and competition into the customer experience, making interactions more engaging and memorable. Brands can further leverage their online presence through gamification by incorporating elements that align with their brand identity and reward loyalty.

For example, Cisco started a “Community Spotlight Awards” program that awards community members with a prestigious profile badge that highlights that member’s outstanding content and engagement. By doing so, Cisco found that this recognition skyrocketed award winners’ additional contributions after receiving the badge.

Gamified features can also transform casual customers into loyal brand enthusiasts driven by the thrill of the game. Most importantly though, gamification is a tool that allows brands to recognize and formally appreciate the time and effort their customers spend in communities. As customers engage more deeply with the brand and receive indicators of appreciation and encouragement from the brand and their peers, loyalty grows stronger, leading to increased advocacy and referrals.

Brands must create a haven for different users by rewarding the desired engagement a brand wants. As Lindsay Sanchez, CMO at Khoros, noted in the Brand Confidence Guide, “When you have customers organically advocating for your brand through user-generated content and discussion, it grows your reputation and turns your community into a destination for attracting and retaining customers.”

Through recognition or tangible benefits, rewards keep the community thriving and encourage members to actively contribute and promote the brand.

Enterprises with brand-owned online communities create a space for customers to connect, engage, and share knowledge about products and services. As a vital part of the customer experience strategy, these communities reduce costs, drive revenue growth, and increase customer lifetime value for brands. 

The innovative K-12 software and cloud-based solutions provider PowerSchool created just such a community, which grew rapidly to support over 12,000 districts and more than 45 million students. As part of this initiative, PowerSchool utilized their community to better connect students, parents, and teachers with their products, resulting in a 50% growth year-over-year and a 97% CSAT score.

This is one of many examples of how, in a customer-centric landscape, brands must adapt to high expectations for self-service, fast responses, personalization, and digital platform interactions to foster loyalty and mitigate churn. As social networks transition to paid models and privacy concerns drive the need for first-party data, Khoros Communities offers a robust solution for brands to safeguard customer relationships, protect their business, and stay competitive.

With the next generation of Khoros Communities, brands are now quickly launching customized, optimized, and measurable owned destinations, all while aligning and conserving resources. 

Want to learn how to start or nurture your community? Read our latest Brand Confidence Guide and the unique research helping drive enterprise digital transformation.